'Disappearance of jeonse is a megatrend'
Land, Infrastructure and Transport Minister Hong Ji-sun said Wednesday she expects housing prices to stabilize by year-end and described the gradual disappearance of the jeonse rental system as a "megatrend."
Hong made the remarks at a national audit session of the National Assembly's land and transport committee, saying apartment prices in the so-called Gangnam 3 districts — Gangnam-gu, Seocho-gu and Songpa-gu — as well as Yongsan-gu had already turned negative.
"In other areas, the pace of housing price increases is also slowing," she said. "I expect the rate of increase to ease to some degree by year-end."
When People Power Party lawmaker Kim Jeong-jae asked whether she agreed that real demand — not speculators — was driving the rise in housing prices, Hong said she did, but added that the recent surge was rooted in three years of inadequate housing supply.
Asked whether she agreed with President Lee Jae Myung's earlier remarks that the jeonse system would disappear, Hong said she viewed it as a megatrend, citing the growth of single-person households and the prevalence of jeonse fraud.
On whether the government would extend the land transaction permit zone designation set to expire at year-end, Hong said she saw some continued demand for the restrictions and would monitor the situation closely, including subscription competition rates, before making a decision.
She also said the Korea Housing and Urban Guarantee Corporation was operating a jeonse and monthly rent trust program to address jeonse fraud, under which tenants can safely deposit their security deposits while landlords receive a steady monthly income.
hss@heraldcorp.com
